Paul Schaafsma outlines vision for Broadland Wineries

English wine is now considered so classy and fashionable that even the Queen has started producing it, but British-made wine is not exactly sexy.

It typically finds itself marooned on the bottom shelf, it is not held in particularly high esteem among the wine trade and it has never had much of a dazzling marketing push. But now the category has an unlikely champion in Paul Schaafsma, the man who made his name by selling tremendous volumes of New World wine to UK retailers, and it is gearing up to conquer the off-trade in 2018.

“Consumers at the moment are finding it tough. They haven’t got any more income with inflation, cost of goods have gone up due to currency, so people are having to spend more but they don’t have any more money,” says Schaafsma, who has just taken over as chief executive at Broadland Wineries in Norfolk. “It’s fine to talk about premiumising the wine offering and I know lots of people want to talk about that. But if people don’t have the money to spend you need to make sure you are catering for them first before you start catering for the 2%-3% of the population that might go from £10-£12.

“With the pressure on grape supply – there have been a few poor vintages of late – and the pressure that currency causes in terms of the cost of bulk wine, imported wine is becoming harder and harder to do at that £5.50 level, the average price point in the UK. We are the only company, as far as I understand, that can do varietal, British-made wine. We can do it in-house and that can retail from a starting price of £3.50. Now, for a shopper who is looking for a bottle of wine and only has a limited budget, that’s going to become more and more important. That delivers a solution for consumers, and for our customers.”

Broadland produces Three Mills, a leading brand in the British-made wine category, which covers anything made in Britain by the fermentation of grape juice or concentrate originating from anywhere in the world.

CHANGING PERCEPTIONS

“It’s a shame that the perception of British-made wine has always been bottom shelf and very cheap, because there is nothing wrong with the wine,” says Schaafsma. “You can taste our British-made Pinot Grigio and it could be from Italy or anywhere – I don’t think you could tell. There has been a perception among retailers, among the wine trade, that this is a dumbed-down wine. We have done a lot of work in terms of creating a quality product and our packaging moving forward will reflect that so the consumer feels confident they are buying a product they are going to enjoy at a price point that’s good value for money. There has been a problem but we are going to fix it and rejuvenate and energise it.

“There is some good work to be done in terms of clarifying it, and we are not trying to compete with English winegrowers. This is British-made wine that is a far different price segment and consumer category, but it’s important, and in these challenging times with currency and Brexit, it’s a product that can potentially be the next big hero.”

Schaafsma has spent his career working for Accolade Wines and Australian Vintage, flooding British supermarkets with brands such as Hardys, Echo Falls, Kumala, Stowells and McGuigan. He was most recently chief executive at Accolade and left the business in February as owner Champ Private Equity was mulling over an IPO. Some senior members of the UK wine trade were surprised to see him reappear in Norfolk in October, but he says there is nowhere he would rather be. “The feedback I have had is that it just makes sense and it’s such a good fit, because to be relevant in this market you need to have UK packing,” he says.

“To have UK packing within your business is a big jump forward. People who are using contract packing are at the mercy of those contract packers, with the schedule and the costs associated with it and the margin they want to charge.”

Some in the trade may still think of Broadland as a contract packer, but it is out of that game entirely and focused solely on supplying the trade with branded and own-label wines. Broadland has a bottling facility that can rival any in the country and a winery that can handle 60 million litres a year.

“Doing it yourself puts you in a very competitive place, and from a service level a strong place,” says Schaafsma. “Suppliers that don’t have bottling facilities have to sub-contract their bottling, which is an additional cost to factor in. Having bottling ourselves puts us in strategically a good position to deliver the right value to our customers. We have an excellent team here from a production, operational point and sourcing point of view.

“Before joining I wasn’t aware of the quality of the operations and the people here and the attention to detail they have. Overlay that with a proper winery – we ferment and create wine here – and the packaging formats we have, and this is a one-stop shop. We can produce, we can import, we can package and we can distribute and that is a fantastic proposition.”

Broadland Wineries was founded in 1965 and has spent the past decade under the ownership and guidance of Mark Lansley. He has built up a business that turns over £60 million annually, makes £2 million profit and is debt-free, so it is in a healthy position. But Lansley is now stepping back to allow Schaafsma to take it to the next level.

“I am fortunate to have inherited an incredible team from Mark Lansley,” Schaafsma says. “That makes the job so much easier, to come in with a team that gets it and wants to move forward. I want to overlay some additional skill sets, some additional capabilities and the right portfolio. If we can do that, there’s no reason we can’t take the business from £60 million to £100 million turnover in two years and that’s really our target.

“I enjoy coming into a business that needs developing. I think it is as good as any packaging facility in the UK. We are BRC double-A rated, we have organic certification and I would go so far as to say it’s one of the best from a wine quality point of view, because of the work Mark and the team have done. I was very interested in bringing a more branded approach to the business, as was Mark, and we agreed that I would work with the existing team, develop that team and overlay my experience and skill set around working with the major retailers and delivering propositions that are relevant.”

Alongside promoting British-made wine, Schaafsma is setting about bolstering the company’s New World portfolio and is due to make several announcements in the coming weeks and months. First up is news that it has secured a distribution deal with Pinnacle Drinks to supply the UK with brands such as James Halliday’s five-star rated Dorrien Estate in the Barossa Valley. It has also unveiled plans to launch a range in partnership with former England cricket captain and wine aficionado Sir Ian Botham.

“I have been amazed at the reaction since I joined the business in terms of large brands that have come to us and said, ‘we’d like to partner with you in terms of you handling our distribution’,” he says. “We are going through a review at the moment of our range and brand architecture in each country. We have partners we are strongly aligned with. Te Pa, for example, in New Zealand is a very strong partner for us.

“We will be looking at each country and seeing what we need to overlay to make the business even more relevant and we will be starting with the New World and going through New Zealand, Australia, Chile, Argentina, South Africa, and pulling together what our brand proposition is going to be.

“We are trying to pull together a team that will ensure our relevance and develop the portfolio. We are trying to get our infrastructure right so that we are appropriate, with the right brands and the right team, overlaying what is already a successful business.

COMPETING WITH MAJOR BRANDS

“There’s no reason why we can’t compete with any of the major wine players. The business is in a very healthy position.”

Broadland is currently only using half its capacity, and does not yet work with 60% of the trade, so there is plenty of potential to grow. “But we want to be ready to grow with the right type of business,” says Schaafsma. “We are not looking for contract packing. We are looking for branded and own-label business with our partners and we will deliver the solutions they require, with the infrastructure and the services we have.”

Consolidation has gripped the UK trade in recent years. Conviviality has led the way in terms of swallowing up companies, while various other mergers and acquisitions have left a smaller supplier base and fewer options for wineries and buyers.

“There has been a lot of consolidation in the UK trade and that has created opportunities from a supplier point of view where they potentially aren’t happy with the level of attention or service they are getting from their brands,” says Schaafsma. “A number of them have contacted us and said: ‘Could we talk because we would like to be the big fish in the small pond rather than competing against a lot of other brands that are also creating noise within that particular company.’

“Consolidation has also meant there is less choice for customers in terms of who they want to work with,” he adds. “If you consolidate too far in terms of working with one partner, the danger is that you lose your negotiation capability and you become too dependent, and if we can provide the solutions and deliver the right margins, price points and service, then it provides a good reason to spread the risk.

“I am conscious a lot of these larger retailers are thinking about the consumer and we need to provide a solution. They are all thinking about their margin. They have currency challenges, Brexit challenges, and their margins have been squeezed because suppliers’ costs have gone up due to these challenges. If their margins have gone down because of currency, and they are still trying to provide the consumer with the right price, everybody is getting squeezed. In terms of consumers, it’s continuing to deliver the product they want, the quality they want, at a price they can afford.

“In terms of our customers, it’s about providing the efficiencies and the appropriate brands to deliver the margin they are looking for. If we can satisfy the consumer, and we can satisfy a customer, then we are relevant. We need to ensure our profitability as well. That’s the challenge. We have a very light, nimble structure. We are not running massive overheads. There are companies out there that are burdened with very large amounts of debt, or very large operating platforms.

“We don’t have that. We can grow our volume and decrease our volume quite quickly in terms of the scale of the company, and we think that will provide more relevance for our customers in future.”